A big block on Broadway
Investment property leased to banks and global brand-name retailers, reports Colin Taylor
Alarge slice of Newmarket’s premier retail strip, with 63 metres of frontage to Broadway and more than
2000sq m of retail buildings plus basement parking, is for sale.
On two lots of leasehold land totalling 1538sq m, the property is occupied by three high-profile anchor tenants: the BNZ bank and multinational apparel retailers Bivouac and Adidas.
“It’s opposite 277 Broadway where the Westfield Newmarket shopping centre is undergoing a $790 million redevelopment and expansion,” says Bill Lissington of Bayleys central Auckland investment team; who is marketing 312-316 and 318-330 Broadway for sale by tender closing at
4pm on Friday, September 14 unless it sells earlier.
A top listing in Bayleys’ latest Total Property portfolio, the property generates net annual rent after ground rent has been paid, of $881,398 increasing to $951,900 in December 2019.
“The purchaser will acquire a big chunk of central Newmarket’s retail and commercial hub which is likely to become even more sought-after by tenants once the new, reinvigorated Westfield complex opens its doors,” Lissington says.
He says the adjoining rectangular shaped buildings for sale have full height glass frontage to Broadway and high-stud retail space along with mezzanine offices. A basement carpark has 54 single and stacked spaces, most of which are leased to the BNZ.
Lissington says the property’s only vacancy is one parking space that could generate additional annual rent of around $2700.
The largest tenant is the BNZ which has occupied the bulk of 318-330 Broadway and its 32.5m of street frontage since 2006. BNZ leases 1182sq m encompassing 698sq m of ground floor space used for its retail banking operations; 407sq m of mezzanine office accommodation and a 58sq m basement storage area.
Its current 14-year lease runs until July 2020 with three seven-year rights of renewal which, if exercised, would take its final expiry out until 2041.
Also leasing 109sq m of ground floor space at 318-330 Broadway is the Co-Operative Bank Ltd on a six-year term until August 2019.
The 736sq m building at 312-316 Broadway has 30.5m of street frontage. “Adidas New Zealand which has been in occupation since 2006 has agreed to a new lease, subject to board approval, for a further five years with no rights of renewal,” says Lissington. “This takes its tenure through to July 2023 and is a vote of confidence in the location by one of the world’s biggest apparel retailers — underlining the fact that these properties are proven performers.”
Adidas occupies 322.5sq m of ground floor space plus a 72.5sq m mezzanine area.
The other occupant in this building is global retailer Bivouac, which specialises in outdoor recreation clothing and equipment. Its lease over 341sq m of the ground floor runs until August of next year with one sixyear right of renewal.
Lissington says the Bivouac, Adidas and Co-operative Bank leases have fixed annual rent increases based on the Consumer Price Index plus 1 per cent, while the BNZ lease has market-related reviews.
“The Bivouac lease also has a review to market in August next year should it decide to exercise its right of renewal.
“This provides the prospect of an upward income adjustment to bring it more into line with market rents for surrounding properties.”
Lissington says the property for sale is in a very tightly held retail block with the ASB Bank and Westpac being neighbours. Across the road, work is well under way on the rebuilding and expansion of Westfield Newmarket.
It encompasses a redevelopment of the existing 277 Broadway building which will be anchored by David Jones’ first Auckland department store and a new Countdown supermarket.
This building will be linked by an air bridge over Mortimer Pass with a substantial new building being constructed at 309 Broadway.
The project is being undertaken by Scentre Group, the owner of 39 Westfield shopping centres across Australasia, and is scheduled for completion in stages next year. It will cover around 4.5ha of land with about
88,000sq m of lettable space plus
2770 parking spaces.
It will also encompass an Events Cinema complex and have more than
230 specialty stores and eateries and feature a rooftop dining precinct with stunning views of Auckland.